How Much Do Google Ads Cost?

Google Ads Cost Estimates

The amount that businesses spend on Google advertising varies depending on your industry and business size.

According to digital marketing service providers WordStream and WebFX, the average midsize business has a monthly budget of $9,000-$10,000 to invest in Google advertising. Average costs per click in the search network are $1-$2 while the display network typically costs less than $1 per click:

Now, let’s examine pay-per-click (PPC) costs more closely.

Pay-Per-Click Costs

The most common way to be charged in Google Ads is by click, hence the name “pay per click.”

With this payment structure, no matter how many times it’s seen or displayed, Google only charges you when a user clicks the ad and goes to your site.

Google Ads also allows you to set daily and monthly budgets for each campaign. Therefore, when you find your best keyword, you can run your ads without surpassing your specified budget.

So, what’s the average cost per click (CPC)?

Average Cost Per Click

There is no one-size-fits-all answer. While the average cost per click is estimated to be in the $1 to $2 range we previously touched on, CPC costs can run from a few pennies per click to more than $50 per click, depending on your industry.

Google Ads uses an auction bidding system. This implies that the higher the level of competition in your industry, the higher the cost per click. That said, highly competitive sectors, such as insurance, can expect to pay tens of dollars per click.

CPC Benchmarks by Industry

Below is a comparison of CPC benchmarks by industry, both on the Search Networks and Google Display Networks.

Data Source: WordStream

Factors Influencing Google Advertising Costs

A number of factors will influence your Google Ads fees. We’ll look at 2 of the major ones:

1. Keywords

The commercial intent of your keywords determines how much you’ll pay for your Google ads. If many other businesses are competing on the same high-value keyword, you’re likely to spend more on your campaigns. The more competitive the keyword is in your industry, the more you’ll pay.

There are 3 things to put into consideration when selecting keywords:

Length

You can use short-tail or long-tail keywords. Short-tail keywords are inclusive. They tend to have high search volumes and higher competition, resulting in higher CPC costs. On the other hand, long-tail keywords are more targeted and have less competition, which translates to lower CPC costs.

Keyword Match Type

Keyword match types include broad match, broad match modifier, exact match and phrase match. Google employs these match types to determine if a keyword matches the user’s search intent. The broader the match type, the higher the opportunities it has to be a search result. This would imply more competition, which increases CPC costs.

Negative Keywords

Negative keywords help you avoid wasting your ad spending on bad clicks by telling Google when you don’t want your ad to appear.

To get a rough idea of how much you’re likely to spend on a particular keyword or phrase, you can use the Google Keyword Planner Tool and the Bid Simulator. This step is best done when you are preparing your Google Ads strategy and planning your budget.

2. Ad Placement Options

This refers to the different areas you can place your Google ad and how this affects your budget. For example, the average CPC across a variety of keywords and industries is $2.69, according to WordStream. However, on the Google Display Network, the average Google Ads cost per click is 63 cents.

Here are the most popular Google ad placement options:

Google Search Sites

For these, targeted ads appear above or below Google search results. They also can appear above, beside or below search results on Google Shopping, Google Play Store and Google Maps.

Google Search Partners

You can choose to place your ads on the search results of Google Search Partners. These are third-party websites that have been approved by Google to run ads. Google partner sites are paid by Google any time someone clicks an ad on them.

Google Display Network

Google-specific platforms such as Gmail, YouTube, Google Finance and Blogger are part of the display network. The network also includes Google apps and mobile sites.

There are several ways to target your ads on the Display Network. These include choosing specific sites and pages and choosing keywords and topics related to what you’re selling. You also can select your audience based on demographics, interests and whether they are return visitors to your site.

Geotargeting

This refers to spending more of your ad budget on a particular geographical location. For example, a pub operating in a metropolis might want to target ads to the people who live and work around the neighborhood. With geotargeting, you’ll find yourself spending more on some locations than others. You also can leave out other spots. Geotargeting allows you to target your ad from a small distance, such as a two-block radius, to an entire state.

Device Type

You can display your ads on 3 device types: desktop, tablets and mobile devices. Depending on your business, specific devices tend to perform better than others. With each device, you’ll incur a different cost. Generally, tablets are the least expensive and desktops are the costliest.

Setting the Right Budget for Google Advertising Costs

Google paid advertising is one of the fastest ways to expand your customer base and bolster your sales. However, going into it without learning the intricacies of the ads business might leave you with losses.

Depending on your industry, keywords can be cheap or extremely expensive. Your ad spend will be determined by the competition around the individual keywords your business is targeting.